England and Wales High Court (Queen's Bench Division) Decisions

IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION

		Royal Courts of Justice Strand, London, WC2A 2LL
		6th March 2008

1. The claimant, Morton Insurance Brokers Limited ('Morton') is an insurance broker. A large part of its business is motor insurance. Mr Adrian Morton is a director and principal shareholder of Morton. The defendant, Mr Avtar Sidhu, was employed by Morton from 28^th September 1998 until his summary dismissal on 6^th September 2002. He was employed at Morton's Southall office initially as an insurance clerk and from 1^st December 1999 as manager. Morton alleges that Mr Sidhu was in breach of the duty of good faith which he owed to his employer in that between June 1999 and June 2001 he issued backdated cover notes to motorists who had been involved in car accidents while uninsured. In all cases the insurer was Sabre Insurance Company Limited ('Sabre'). Sabre paid out the sums claimed in respect of these accidents.
2. Following a suspicious claim by Mr Salh under a manual cover note issued by Mr Sidhu, Sabre conducted an investigation of that claim and other motor accident claims brokered by Morton. Sabre concluded that Mr Sidhu had backdated a manual cover note issued to Mr Salh and other cover notes purporting to show that motorists had insurance cover for an uninsured event. In all these cases the accident date was soon after the alleged inception date of insurance cover and before the relevant documentation was sent to Sabre. Sabre did not pay out on the claim made by Mr Salh and claimed from Morton, as vicariously liable for the acts of Mr Sidhu, reimbursement of monies it had paid out under the other eight manual cover notes listed in paragraph 4 of the Particulars of Claim. A mediated settlement of Sabre's claim was reached on 25^th January 2005 whereby Morton agreed to pay to Sabre the sum of £55,000 in settlement of its claim in respect of manual cover notes issued by Mr Sidhu which it concluded had been backdated by him.
3. Morton claims damages for breach of contract from Mr Sidhu in the sum it paid to Sabre in settlement of its claim. In addition, Morton claims damages in the sum of the additional cost of professional indemnity insurance incurred as a result of Mr Sidhu's alleged actions. Morton also claims associated expenditure, interest and costs.
4. It is quite properly accepted by Mr Metzer appearing for Mr Sidhu that if Morton establishes that Mr Sidhu did backdate cover notes as is alleged then he was in breach of the duty of good faith owed to his employer under his contract of employment and is liable for reasonably foreseeable loss flowing from the breach.
5. Thus, the case as to liability turns on whether Morton has established on the balance of probabilities that Mr Sidhu did backdate the cover notes as alleged thereby purporting to show that insurance cover was in place at the time of an accident when the claimant was uninsured. Counsel are agreed that in light of the gravity of the allegation against Mr Sidhu the evidence must be compelling for it to be found that he did backdate cover notes. The more serious the allegation the more compelling must be the evidence. Counsel are also agreed that it is not necessary for Morton to show that Mr Sidhu benefited from his actions to establish a breach of the duty of good faith. However, personal benefit may be of evidential assistance in determining whether Mr Sidhu had backdated the cover notes as alleged.
6. As to quantum of damages, Mr Metzer takes no issue with the figures but puts the claimant to proof that the damages claimed were reasonably foreseeable.
7. Mr Morton and Mr McDonald of Sabre gave evidence for the claimant. Mr Sidhu gave evidence on his own behalf. The documentary evidence included copies of the disputed Sabre manual cover notes, proposal forms and receipts relating to the disputed claims. A counterfoil book of some manual cover notes was produced as were copies of computer records relating to the disputed cover notes and the letters to Sabre regarding the relevant insurance cover. Letters recording the disciplinary hearings which Morton conducted with Mr Sidhu were produced as was a summary of his interview by police. The parties also demonstrated the operation of the computer systems used by Morton at the time of production of the manual cover notes in issue.
8. After the conclusion of evidence and argument, Mr Sidhu wrote to his solicitors with a recollection of how a quotation could be saved on the claimant's system and subsequently transferred to the back office function of the computer system, BROOMS (Broker Office Management System). This evidence was of relevance to Mr Sidhu's explanation of the way in which he dealt with quotations for the disputed insurance. Mr Morton had given evidence that quotations could not be saved on the PRISM (Prospect Record Information and Management System) side of their computer system. Mr Sidhu was asked in cross examination why a copy of the quote was not kept on a client file and suggesting that additional work would be caused by entering the quotation on the BROOMS system at a later stage. Mr Sidhu at first gave evidence that a quotation could be saved in PRISM but under cross examination agreed that it could not. It was not until the parties came to court on 20^th December 2007 that they agreed that a quotation for insurance could be saved on the Prospect/PRISM side of the computer

Relevant facts

Transacting insurance business at Morton

9. Morton has three places of business: Southall, Childs Hill and Camberwell. As manager of the Southall branch Mr Sidhu had two employees working under him.
10. Morton placed motor insurance business with a number of different insurers including Sabre. Morton was authorised to issue insurance certificates on behalf of Sabre. Sabre was one of few insurers which provided short term cover for three months.
11. There were two ways of recording and obtaining an insurance policy for a customer. The more usual was EDI (Electronic Data Interchange) which was a fully computerised method. The other was a manual method.
12. A quotation was obtained for a customer from basic information using the quotation side of Morton's computer system known as PRISM. The quote could be saved as a Prospect in PRISM. The date of creation of the Prospect was shown on the computer record. If a different quotation were given subsequently in relation to the same insurance, the original date of the quotation would be overwritten giving the later date. This quotation date could not be altered manually.
13. It was usual to process insurance documentation using the ED1 system. If a quotation was accepted, a proposal form was completed on line, the premium was paid and a certificate of insurance printed out and given to the client. If it was needed, a cover note would be generated by the computer.
14. When the quotation was accepted, the date on which the Prospect was transferred to BROOMS was recorded on the system. As with the date of the quotation, the date of transfer to BROOMS could not be altered. A Level 1 page was created in BROOMS which had a reference number and a Prospect quotation date but was not policy specific. The date on which the premium was received by Morton was recorded and also entered on the computer. This can be seen as 'Ledger date' on the claim settlement forms. All necessary information relating to the insurance cover was transferred electronically to the insurer.
15. A level 2 entry was generated in BROOMS which was policy specific with a policy number and name of the insurer. This would contain diary entries including the date of any cover note issued, the renewal date and any further documentation needed such as driving license and proof of no claims bonus. If a non-standard letter was written it would be recorded on the diary as OOL (one off letter). The dates of these diary entries were not generated automatically and could be altered. A level 3 entry in BROOMS was created which contained more detailed information such as the year of manufacture of the car, the number of doors and whether the insured had a no claims bonus.
16. If the manual procedure were used, a proposal form would be completed manually and a receipt for the premium handwritten. If it was needed, a cover note was produced manually. Unlike the EDI system, policy documentation was not then given to the customer but a letter was written to the insurer enclosing necessary information asking for the policy to be sent.
17. Mr Sidhu claimed that more details were needed to complete the EDI proposal form than if a Prospect form were completed using the manual method. Mr Morton appeared not to make this distinction. Lack of information was not the reason given by Mr Sidhu for not using EDI system when he was questioned by Mr Morton at the disciplinary hearings although it was raised by him at his police interview and at trial.

The suspicious claim and the inquiry

18. On 18^th June 2001 Sabre received a claim from Mr Salh that his vehicle had been stolen. The inception date of his insurance policy which had been brokered by Morton was alleged to be 31^st May 2001 and the date of the alleged theft, 2^nd June 2001. The vehicle was recovered with no theft damage but was a write off because of accident damage. A loss adjuster was appointed to investigate Mr Salh's claim. His vehicle said to be worth approximately £25,000 was purchased on 5^th March 2001 and had not been insured until the alleged inception of the Sabre policy on 31^st May 2001. The mileage on the vehicle indicated that the vehicle had been driven throughout the uninsured period. Sabre did not pay out on Mr Salh's policy and informed Morton of its suspicions. Mr McDonald of Sabre was asked to investigate.
19. Mr McDonald looked at claim files relating to insurance brokered by Morton. He discovered that whenever a claim had occurred within two weeks of inception date of the policy, cover notes had been issued. These had been issued manually. There were fifteen such claims between 1999 and 2002. All of the related cover notes had been issued by Mr Sidhu. In each case the quotation for the insurance policy was dated after the date of the claim. In respect of all fifteen policies the insured had paid the policy premium in cash. Thirteen of the fifteen policies were for three months.
20. On 16^th May 2002 Mr Webb and Mr McDonald of Sabre interviewed Mr Sidhu. Mr Morton was also present. Mr Morton suspended Mr Sidhu from duty and instructed Insurance Monitoring Service Ltd to carry out a cover note audit at all Morton's branches. The day after Mr McDonald confronted Mr Sidhu with his findings, Mr Sidhu contacted Sabre and offered to re-mortgage his or his father's property to reimburse Sabre the £500,000 reserved against the claims under the suspect cover notes. One such claim related to a possible brain damage case with an insurance reserve of £272,000.
21. Insurance Monitoring Service Ltd produced two reports dated 12^th June 2002 and 3^rd January 2003 of their cover note audits. In eleven of the thirty six cases where the claim date was near the inception date of the policy Sabre was the insurer. In all of these cases there were manual cover notes written by Mr Sidhu. Ten cases of a claim date near the inception date of the policy were found at Morton's Childs Hill and Camberwell branches. Of these, in one case there was no cover as the accident date preceded the inception date, three of the remaining nine policies had been written by sub agents, one case was written using EDI and cover could not have been backdated. In all the remaining five cases either the premium was received on or before the accident date or instructions were held on file confirming cover prior to the accident date.
22. Morton incurred costs in the sum of £1,938.75 (including VAT) for two cover note audits by Insurance Monitoring Service Limited.
23. After receipt of the first cover note audit Mr Morton held disciplinary hearings with Mr Sidhu to put to him allegations that he had backdated insurance cover notes. Mr Morton recorded what had happened at such hearings in letters written to Mr Sidhu on the day of each hearing.
24. Mr Sidhu attended a disciplinary meeting on 12^th July 2002. Mr Morton referred to the fact that Sabre had produced evidence to show that claims had been made under policies arranged by Mr Sidhu allegedly shortly before an accident. The policies had been issued on a manual basis, the business was submitted to Sabre after the date of the loss. Mr Morton's investigations had shown that the ledger date and premium received date were also after the date of the loss. In some cases the premium was not passed to Morton until one month after the alleged effective date of the insurance. Mr Morton asked Mr Sidhu for his explanation of these serious allegations.
25. In his letter of 12^th July 2002 Mr Morton recorded that Mr Sidhu's explanation for cases of alleged backdating of insurance cover was that he was:

'…. merely behind with your [his] paperwork and at times borrowed money from the company by failing to record that business had been written or that premiums had been received on behalf of the company.'

Mr Morton observed:

'My investigations so far have not supported your assertion on any of these cases and I cannot accept your explanation. From the evidence I have before me I have formed the opinion that there is a likelihood that you have indeed backdated cover enabling clients to submit fraudulent claims.'

26. In a letter of 6^th September 2002 following a further disciplinary meeting on that day, Mr Morton wrote:

'…there is no evidence on file or on our computer system that would prove that these cases were not backdated. Furthermore, there is no evidence that would raise an element of doubt that the substantial evidence to support these allegations is incorrect.

At this point in our meeting we discussed some examples of these cases. Again you could provide no reasonable explanation for your actions and maintained your denial of backdating insurance cover on these cases.'

27. Mr Sidhu was summarily dismissed for gross misconduct on 6th September 2002. Mr Sidhu was informed that the reasons for his dismissal were:

• Backdating cover enabling clients to submit fraudulent claims

• Failure to record insurance transactions within a reasonable period of time

• Failure to account for monies received on behalf of the company within a reasonable period of time.

He did not bring claims for wrongful or unfair dismissal.

28. On 16^th September 2002 Mr Sidhu was interviewed at Reigate police station. In the event charges against him were not pursued.
29. Sabre claimed against Morton reimbursement of the money it paid in respect of accident claims made under insurance policies which it concluded had been backdated. By a mediated settlement on 25^th January 2005 Morton agreed to pay Sabre the sum of £55,000 in respect of claims arising from the issue of cover notes by Mr Sidhu.
30. Morton unsuccessfully attempted to claim under its professional indemnity insurance in relation to the sum it paid in settlement of Sabre's claim. It claims that it incurred £8,241.92 in respect of solicitors' fees, counsel's fees and disbursements (including VAT) in doing so.
31. Mr Sidhu's acts were reported to Morton's professional indemnity insurers in May 2002 following intimation of a claim against it by Sabre. The steps which Morton had to take to obtain professional indemnity insurance following the claim by Sabre and the additional cost of such insurance are set out in Paragraph 6 (c) of the Particulars of Claim.
32. In March 2002, before the alleged activities of Mr Sidhu were discovered the cost of Morton's professional indemnity insurance for 12 months was £5,386.50. It is alleged that Morton had extreme difficulty in renewing its PI policy. To secure a quotation, in January 2003 Morton obtained a risk management analysis carried out by Alexander Forbes Professions at a cost to the company of £4,230. Morton obtained professional indemnity insurance cover in March 2003 at the greatly increased cost of £32,672.91. In March 2004 the cost of the professional indemnity insurance was £14,700 and in March 2005, £9,450. Morton claims damages in respect of the additional professional indemnity insurance premiums it had to pay in 2003, 2004 and 2005 as a result of Mr Sidhu's actions together with the cost of the risk management analysis.

Did Mr Sidhu backdate the disputed cover notes?

Morton's contentions

33. The Schedule prepared by Morton of the alleged inception date, the claim (accident) date, the quotation date, the Prospect conversion date (transfer to BROOMS), the date on which the payment of the premium was entered on the claimant's system and the date documentation was received by (or sent to) Sabre is not disputed by Mr Sidhu.
34. There is no dispute between the parties that all the accidents in respect of which claims were made under cover notes alleged to have been backdated by Mr Sidhu occurred before:

Any Prospect record of a quotation

The date of receipt of premium entered in the Ledger (no date for Ahmed)

The date of transfer to BROOMS (no date for Ahmed)

The date of the letter sent to Sabre notifying them that cover was required and that policy documents should be issued.

35. In all cases the accident occurred shortly after the alleged inception of insurance.
36. In all cases the accident was not notified until after documentation relating to the inception of the insurance was sent to Sabre. In most cases there was a considerable delay before notification of the accident: (Mohammed (5 weeks), Karwal (3 weeks), Dillon (3 weeks), Ghai (1 month), Singh (1 month), Bhola (1 month).
37. All the disputed cover notes were created by Mr Sidhu manually. By the conclusion of the hearing Mr Morton agreed that a quotation could be saved on the PRISM system. However, there was no evidence that a quotation had been given when the cover note was alleged to have been drawn up. No hard copies existed of such quotations and the Prospect dates were all after the alleged inception of insurance.
38. All receipts of premiums received for such insurance cover were handwritten and dated by Mr Sidhu and bore the dates of the disputed cover notes. In all cases the premiums are noted as having been paid in cash. Some of these cash payments were for very large sums, one being £2,658.60 paid by Mr Salh. These cash payments were not recorded on Morton's systems until some time after their alleged receipt by Mr Sidhu .
39. In all but two cases the insurance was for the minimum period of three months.
40. In all cases the alleged date of inception of the insurance cover was before the Prospect details were transferred to BROOMS and before receipt of the premia were entered on the computer system.
41. In at least two cases (Mohammed and Siddique) the computerised diary shows that a one off letter (OOL) was written to the insured at the time of the alleged inception of the insurance. No copy of any such letter was found.
42. In giving evidence Mr Morton questioned why the manual system had been used to generate all the suspect cover notes when, in his view, the EDI system was labour saving. Additional time would have been taken up by writing letters to the insurers and any one off letters to the client and in completing the Level 2 diary.
43. Mr Morton did not accept that pressure of work was the reason why Mr Sidhu used the manual system.
44. Mr Sidhu sought to explain the alleged delay in recording the receipt by him of cash premia by saying that he had 'borrowed' the money.
45. Mr Morton questioned whether the offer made by Mr Sidhu to reimburse Sabre for the provision it had to make in regard to claims under the disputed cover notes was the act of a man who had done no wrong.
46. All the evidence and the absence of a credible explanation from Mr Sidhu led Mr Morton to believe that Mr Sidhu had backdated cover notes.

Mr Sidhu's case

47. Mr Sidhu gave evidence that he would give a prospective client an insurance quote. He said that sometimes he would print it out if the client asked for it otherwise he would not. When asked why there were no quotes on file he said that the printout might have been destroyed.
48. Mr Sidhu initially said that a quote could be saved on the computer. The quotation given to and accepted by a client could be saved on PRISM and transferred to BROOMS at a later date. Under cross examination and after a computer demonstration he then said that he was wrong and that quotes could not be saved. Agreement was reached on 20^th December 2007 that quotes could be saved in PRISM,
49. Mr Sidhu claimed that he did not use the EDI system because of pressure of work. Using the manual system he would enter policy information onto the computer later when he had time. At trial Mr Sidhu also referred to a need for additional information such as particulars of no claims bonus, driving convictions, number of years driving and the date of purchase and age of car in order to use the EDI system.
50. Mr Morton agreed that staff have discretion whether to use EDI or the manual system. He also agreed that employees other than Mr Sidhu issued manual cover notes.
51. Mr Morton never queried the issuing of manual cover notes. It was within Mr Sidhu's discretion whether or not to use EDI.
52. Mr Sidhu said that in respect of the disputed cover notes he kept a diary of events such as the date of inception of the policy. He stated that on transfer to BROOMS he would delete this information and enter it manually on the level 2 diary.
53. Books of manual cover note forms were supplied by various insurers. Only one such book supplied by Sabre could be found which related to the relevant period. The counterfoil cover notes supplied by Mr Sidhu from that book were in chronological order with other cover notes.
54. Mr Sidhu said that the delay in sending documentation to Sabre was caused by pressure of work. Sabre never complained about any such delay.
55. When asked why there were considerable delays in notifying the accidents relating to the disputed cover notes Mr Sidhu said that the insured may have wanted to settle direct with the other party and therefore not notify the insurers.
56. The Southall office was busy. Mr Sidhu worked a considerable amount of overtime as can be seen from his May 2002 payslip. Even after his dismissal Mr Sidhu was asked to go in to the Southall office of Morton to clear the backlog of work under supervision.
57. Some accident claims were made soon after policies were issued by the Childs Hill branch but there were no allegations of backdating.
58. Mr Morton agreed that it can happen that an accident occurs soon after the inception of insurance.
59. The reason why Mr Sidhu offered to raise the money to pay Sabre its provision against claims was to save his family from distress. He did not make any admission of liability nor agree that he was backdating insurance cover.
60. Mr Sidhu derived no financial benefit from the disputed transactions.
61. Mr Sidhu had a good employment record with Morton.

Discussion

62. The allegations against Mr Sidhu are extremely serious. They are that he backdated cover notes for clients to represent that insurance cover was in place for an uninsured event to enable a claim to be made. Counsel are agreed that the proper approach to the standard of proof required to establish on the balance of probabilities an allegation of this gravity is that set out by Lord Nicholls in In re H (Minors) [1996] AC 563. At page 586E Lord Nicholls held:

'The balance of probability standard means that a court is satisfied an event occurred if the court considers that, on the evidence, the occurrence of the event was more likely than not. When assessing the probabilities the court will have in mind as a factor, to whatever extent is appropriate in the particular case, that the more serious the allegation the less likely it is that the event occurred and, hence, the stronger should be the evidence before the court concludes that the allegation is established on the balance of probability. Fraud is less likely than negligence.'

63. The relevant evidence is not in dispute. The issue to be determined in this case, whether Morton has established on a balance of probabilities that Mr Sidhu backdated temporary cover notes turns on the proper inference to be drawn from that evidence. In accordance with Lord Nicholls' dicta, the evidence supporting the drawing of such an inference would have to be compelling.
64. Simon Edwards, counsel on behalf of Morton relies on the matters set out above under 'Morton's contentions' to establish that Mr Sidhu had backdated the disputed cover notes.
65. In favour of Mr Sidhu I have taken into account all the matters set out above under 'Mr Sidhu's case' and raised on his behalf by Mr Metzer. In particular I take into account the fact that Mr Sidhu has been a good and trusted employee of Morton and that there is no evidence that he has gained from any backdating of cover notes or that he knew or had connections with any person on the disputed claims list. These matters make it less likely that Mr Sidhu would have carried out the serious act of backdating cover notes. There was evidence to suggest that accidents do sometimes occur soon after the inception date of insurance as with some policies written at the Childs Hill branch.
66. During the course of the hearing it was agreed that Mr Sidhu had a discretion as to whether to use the EDI system or the manual system for generating insurance policies and cover notes. As for matters relied on by Morton as establishing his wrongdoing, Mr Sidhu's explanation for using the manual rather than the EDI system was principally pressure of work. There was credible evidence and I accept that the Southall office was extremely busy on occasions and that backlogs of work built up. Mr Sidhu referred to an additional reason for using the manual system rather than EDI. Although the evidence on the point was not entirely clear, I accept that it may be necessary to have more detailed information from the client in order to use the EDI system than is necessary for the manual system.
67. Mr Sidhu's explanation for delay in entering the disputed insurance onto BROOMS was pressure of work. He referred to the computer diary entries which purported to show that insurance had been put in place before the transfer to BROOMS. Reference was also made to one off letters which Mr Sidhu claimed were sent to clients on the inception of insurance. No copies of these letters were in the relevant files. To explain computerised diary entries which antedated the transfer to BROOMS Mr Sidhu said that he entered these dates manually from records which he then deleted. He explained the delay in sending the relevant documentation to Sabre by reference to pressure of work.
68. When interviewed by Morton and in giving evidence in these proceedings Mr Sidhu was asked why cash in respect of insurance premiums for the disputed cover notes was not entered into Morton's records until some time after the alleged date of receipt and the alleged inception of insurance. He said that he had 'borrowed' the money. In evidence given in these proceedings Mr Sidhu agreed that he had offered to pay a large sum of money in respect of the provision Sabre had made in respect of the disputed claims but indicated that he did so to spare his family stress and anxiety.
69. I find that there is compelling evidence that Mr Sidhu backdated the disputed cover notes. Whilst the parties are now agreed that a Prospect quotation can be saved on PRISM and transferred to BROOMS on a later date, none of the Prospect quotation dates are on or before the date of inception of insurance under the disputed cover notes. The date of transfer to BROOMS is another unalterable date. None of the information relating to the insurance cover notes in issue was transferred to BROOMS on the alleged date of inception of cover as would have been expected.
70. Another unalterable fact is the date on which payment of the premium was recorded on Morton's system. This date is shown on the computerised records as 'Ledger date'. In none of the disputed cases does the date of the handwritten receipts of premiums by Mr Sidhu correspond with the Ledger date. Mr Sidhu's explanation for the delay between alleged receipt of the premium and the record on Morton's system is not credible. He says that the premiums were not entered on Morton's records when they were received because he 'borrowed' the money. In my judgment Mr Sidhu concocted this fanciful explanation to deflect the obvious comment that the date of inception of the insurance would be no earlier than the date on which the premium was received.
71. The premiums in respect of all the disputed cover notes were paid in cash. This was so notwithstanding that some of the payments were very large indeed. Payment in cash made it difficult to discover when the sums were actually received.
72. Further, the dates on which insurance information was sent to Sabre were after the related accidents had occurred but before they were notified to the insurers.
73. The use of the manual system enabled Mr Sidhu to backdate cover notes. If EDI had been used there would have been a clear computerised audit trail of the date on which the proposal form was completed and the cover note printed out. All of the insurance which was provided under the disputed cover notes was written manually by Mr Sidhu. I reject his explanation that he used the manual system because of pressure of work. I accept the evidence of Mr Morton that use of the manual system creates more work for the operator. Mr Sidhu said that additional information was needed to use EDI. However he did not give evidence as to what information was lacking in relation to any of the cases in issue. I reject Mr Sidhu's explanations for using the manual system for writing the insurance to which the disputed cover notes relate. In my judgment Mr Sidhu used the manual system in order to avoid the creation of an audit trail in relation to insurance cover which I find that he backdated.
74. In coming to my conclusion that Morton has established that Mr Sidhu backdated the disputed cover notes I have taken into account his good employment record with Morton and the absence of any evidence that he profited from such wrongdoing. The absence of evidence of any motive whether financial or of friendship for such wrongdoing has caused me to require particularly compelling evidence before finding the case proved. However, on the evidence, I am driven to such a conclusion.

Damages

75. Morton is entitled to recover its losses caused by Mr Sidhu's breach of contract. I find that each of the heads of loss claimed were caused by Mr Sidhu's breach of contract and were reasonably foreseeable. I therefore give judgment for the claimant in the following sums:

(1) £55,000 paid to Sabre;

(2) £ 8,241.92 (less VAT if appropriate) claimed in respect of fees incurred in dealing with Sabre's claim and in seeking to recover from their own PI insurers;

(3) £4,230 (less VAT if appropriate) claimed in respect of a risk management analysis carried out by Alexander Forbes Professions in January 2003;

(4) Additional indemnity insurance premiums paid in 2003-2005. In my judgment the appropriate calculation is the difference between the premium paid in 2002 plus 10% compound per annum which Mr Edwards agrees is appropriate to allow for the increase in insurance costs not attributable to Mr Sidhu's actions and the premiums Morton had to pay for such insurance in the three succeeding years;

(5) £1,938.75 (less VAT if appropriate) for two cover note audits;

(6) Interest;

(7) Costs.